Reasons for Getting a Loan from a Financial Institution
Loans have many numerous uses and can be used for business expansion, paying emergency expenses such as medical bills, buying a home, and paying for current expenses such as utility bills. Loans are vital since they enable us to pay our urgent needs even when we lack the money. There are many institutions that give people loans. You can apply for a loan from banks, financial institution and even from friends, family members, at work or even from SACCOs. However, all these sources have various benefits and limitations.
It is important to note that numerous guys in the past used to get loans from banks. Currently, there has been a shift as many people right now prefer taking a loan from a financial institution rather than the banks. There are many benefits of taking a loan from financial institutions than applying for bank’s loans. This article, therefore, explains some of the reasons why an individual can prefer a loan from a financial institution and not banks.
The first reason why many people like taking loans from financial institutions are because they have a simple and easy application process. Banks will need an individual to undergo a thorough and rigorous loan application process before issuing the advance. In case you want a loan from a bank, you will need to avail yourself to the nearest bank branch to fill out the manual application forms. On the other hand, when applying for a loan from a financial institution, there is usually a simple and straightforward process that does not involve filling of any form.
The second importance of getting a loan from financial institutions is that they have a faster approval process when compared to banks system that takes several months. Financial institutions approve loans faster than banks. When getting a loan from a bank you will have to wait for three months to have the cash deposited in your account in some cases it even takes longer. On the hand, financial institutions approve their loans within a day. Thus for a person who requires money urgently for emergency needs such as taking a loved to a hospital, applying for a loan from a financial institution is the best option they can use to get money quickly.
The third importance of getting a loan from a financial institution is that you will get flexible loan amounts as opposed to banks that offer rigid loan amounts. Financial institutions will give a loan based on your project and the viability of your idea whereas banks use your savings and your pays slips to calculate loan amounts.
In conclusion, getting a loan from a financial institution is actually better than taking a loan from a commercial bank as explained in this report.